Updated 03 December 2020
A good employee benefits package is no longer just for big companies. Now smaller businesses are getting in on the act with low-cost benefits that are among the most effective for recruitment and retention. Michael Englefield of Drewberry explains.
Employee benefits are an invaluable tool for any business that wants to find and keep the best people. Though initially the main attractions may be the salary and the job itself, it’s the day-to-day additional perks that can build a long-term emotional attachment to an employer, and make staff less likely to look elsewhere.
In the past, the big corporations with their greater spending power have had an advantage in this area. But that’s changing. Today, many of the most appreciated employee benefits come at an affordable cost for small businesses, while some are potentially revenue-neutral or even free.
Here’s how you might build an employee benefits package that doesn’t cost a packet.
While the likes of Airbnb can afford to splash the cash with a $2,000 stipend for employees to spend travelling to any Airbnb location, you might instead look to offer extra holiday days. You might offer additional days based on length of service, add an additional day for employees to take their birthdays off, allow employees to ‘buy’ additional days through a salary sacrifice scheme, or even do something as simple as closing the office over the Christmas to New Year period, giving everyone some extra time off.
Some of the ritziest firms out there also have the money to spend on in-office employee entertainment, such as visits by DJs or even live musical performances for their employees. Needless to say, most small businesses don’t have the funds (or the office space) to accommodate a grime festival, but there are smaller-scale alternatives. Try implementing a regular awards program for ‘star’ employees, where prizes on offer include high street gift vouchers or cinema tickets, for instance.
Poor work-life balance often comes top of employees’ grumbles when they’re surveyed about what they dislike about their work, so it’s important to consider this and see if there’s any room to relieve the pressure. Family time in particular can be impacted by a heavy workload, which is why many larger employers increasingly offer flexible / home working and parental leave above and beyond the statutory minimum.
With many office jobs these days it’s usually possible to work from anywhere with wi-fi, so if it works for you, try offering each employee at least one home-working day a week. You can even make savings yourself if you don’t need as many desks every day.
Unsurprisingly, sporting goods giants Nike and Reebok have packages that include onsite gyms and fitness classes. People who join such companies are often keen to stay in peak physical condition, so it makes sense for these firms to offer those benefits. However, there are also numerous advantages to employers in encouraging an active workforce. Not only do people appreciate their gym memberships, but regular exercise can improve not just their physical but also their mental health. The benefit to you is therefore threefold: staff that are healthier, happier and taking less time off.
An onsite gym may stretch most budgets, but it’s relatively inexpensive to offer a discounted membership at a local gym. Another low-cost perk is to provide office fruit deliveries – helping employees avoid the dreaded 3pm biscuit binge, while making them feel valued and cared about. You could also investigate offering standing desks to those who want to reduce their time spent sitting – this can be great for preventing back problems and other health issues.
You might also decide to offer your employees access to fast, efficient private healthcare. You can achieve this with a business health insurance policy, where you pay premiums in exchange for your people having access to private medical treatment when they need it. This can ensure that anyone suffering from an acute health condition can get treatment and return to work faster than they might have done if they had to go on a waiting list.
For more information, check out Drewberry’s comprehensive guide to business health insurance for small companies.
There are other employee benefits insurance products you can offer to help them achieve financial security. Group income protection pays a proportion of an employee’s wages if they’re too ill to do their job, helping to retain an income even after standard company sick pay ends.
Meanwhile, one of the most valued – and often the cheapest – employee insurances you can offer is death in service cover. This works in a similar way to individual life insurance, paying a cash lump sum to a person’s loved ones if they should die while employed by you.
You can find out more in Drewberry’s complete guide to death in service for SMEs.
‘If they’re a small business wanting employee insurance, death in service cover is often the place my clients start,’ explains Nadeem Farid, Employee Benefits Expert at Drewberry. ‘This is because it’s relatively cheap, simple to understand yet highly valued by staff and their families. It’s priced in the reach of most small businesses, especially when you use a whole of market adviser to keep a lid on costs, and the outlay can see returns in the form of a significant boost to employee morale.
‘Above all, remember that you don’t need to offer the flashiest employee benefits for your small business, especially when you’re on a budget. Instead, consider that even minor changes to the working environment can make a big difference to your employees, so try starting small and scaling up when possible. Soon you’ll have an employee benefits package tailored to the needs of both your business and your workforce.’
Drewberry is a fast-growing UK financial adviser with offices in London and Brighton.